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Expiring gas tax may be next battle on the Hill

With the debt debate paralyzing Congress, the expiring gas tax has been off the radar. |
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The federal Highway Trust Fund — the largest source of cash for mass transit and road improvements — is funded by the tax on fuel. In 2008, when high gas prices kept consumers away from the pump, the fund temporarily ran out of money, forcing Congress to appropriate an additional $8 billion to keep road projects on track.

Now, with many states facing budget shortfalls and cutbacks, it’s unclear whether states could assume a larger role in maintaining their highways. Experts say that an expiration of the gas tax would throw the nation’s transportation system into chaos.

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“It’s the most important transportation funding source we have,” said Carl Davis, an analyst with the group Citizens for Tax Justice. “It would be absolutely devastating to that trust fund.”

The Obama administration has already called on Congress to preserve the nation’s current level of highway funding, telling POLITICO that it should be a nonpartisan issue.

“Extending surface transportation authorization, which has received bipartisan support, is crucial to America’s long-term prosperity, and we’re confident that lawmakers on both sides of the aisle can work together to protect our investment in transportation infrastructure in a fiscally responsible manner,” said Meg Reilly, spokeswoman with the Office of Management and Budget.

Indeed, in past years, renewals — and even increases — of the fuel tax have been fairly noncontroversial. White House and Congresses controlled by both parties have overseen increases and extensions of a tax on petroleum dating back to 1932.

The Reagan administration raised the tax in 1982, and former President George H.W. Bush supported another increase in 1990. Former President Bill Clinton initially proposed a sweeping new energy tax but abandoned those plans and raised the tax to its current level in 1993. The rising tax revenues and balanced budgets at the end of the Clinton years helped end the issue of further increases, but the tax was renewed in 2005 as part of a big transportation spending bill. An attempt to roll back the tax in 2000 failed to attract much attention on the Hill, and a proposed suspension when gas prices were soaring in 2008 also failed to gain traction in Congress. “Nobody’s wanted to increase it for a long time, but there hasn’t been a big push to decease it,” said Emil Frankel, a scholar with the Bipartisan Policy Center who has advocated raising the tax rather than abolishing it. “It has generally been extended without much debate. But the atmosphere is very different now.”

More policy-oriented conservative groups — even libertarian scholars — believe that the tax must ultimately be renewed.

“I have every expectation that will happen this time,” the conservative Heritage Foundation’s Ronald Utt said on renewing the tax. “If nobody has a bill to replace it, then they’ll have to.”

“It’s no question that it should not expire,” said Robert Poole, a transportation policy expert with the libertarian Reason Foundation. “There’s certainly good grounds for rethinking the federal role as it has evolved,” he told POLITICO. But “if it were to suddenly go away, it would be chaotic.”

Readers' Comments (71)

No reason for the Feds to be in the gas tax business. Let the States decide. This tax should not be renewed - the Trust Fund is just a big slush fund that pols use to give us back our money like they are doing us a favor.

Good idea. Let the states fix their own roads. No interstate highways. If a state doesn't want to fix its roads and let's them get unsafe for interstate commerce, okay by me. Who needs interstate highways anyway when each state is an island to itself.

Eliminate the TAX at best, and at worst reduce it by 70%. Stop having the FEDs pay for local roads; the FEDs should only pay for interstate roads/repairs/improvements. Local roadway spending should be the under the juristiction of city/county/state authorities and the taxes for such roads should come from those three entities. Let the states take the gas tax money directly and decide how to spend it ....I don't some nit-wit in Wahsington telling me in Texas how much of MY MONEY that I get back to build roads in my city.

The GOP will want to reduce the tax to 10% and if they don't get their way they will blow up the country. Obama will say no way and he won't budge. No way, no how! Then he will cave in and give the repugs a 15% reduction plus he will end Medicare to "sweeten" the deal and he will call it a great victory. Republicans will unite and call Obama a dictator and a communist/fascist/ socialist/Marxist, too. Then our already dilapidated roads will continue to crumble and our descent into third world hell will accelerate.

Bu really, who needs roads and highways? I mean what value do we get from them? What the hell has a national highway system ever done to help anyone? Just another boondoggle so demotwats can win elections by spending other people's money. The sooner it is gone the better. We can all keep more of our "wealth" that way. Where is it written in the Constitution that the gubmint builds highways? Presient Bachman will proudly sign the legislation handing our roads over to Halliburton and GE who will now charge 4 dollars a mile and that will be called a "free market" solution. The sooner we get real and abolish gas taxes the sooner we can be more like Iraq or Columbia. I can hardly wait. I knew by buggy whip stocks were a good buy.

I think it would be good to eliminate the tax and the funding associated with the tax. States like North Dakota, Montana, Alaska and other states with small populations do not need interstate highways anyway. If they want them they should pay for them themselves. Also it is well known to any economist that eliminating the tax will not result in lower prices at the pump. The price will increase since the driving populace has already shown a willingness to pay at the previous price. In this manner the oil companies will get the money instead of our government. People in these unpopulated states will have to pay more for their roads and still pay high prices at the pump.

Sounds good to me, especially since I like high gas prices and don't like paying money for the roads in these red states.

This tax should actually be raised. Maybe then people would carpool. Maybe then people would get off their asses and ride bikes. Maybe then people would begin to buy/push for fuel efficient cars. Gas taxes aren't just about revenue. They are about discouraging destructive behavior. It is similar to the taxes placed on things like cigarettes and alcohol.

The States depend on this money from the Federal Government, if the tax and ultimately funding from the Fed went away does anyone believe that the states would'nt just impose a higher tax themselves to make up for the shortfall.

It made sense when the interstate system was being built, but I think at this point it is no longer necessary for the Federal Government to be involved, maintaining commerce is in every states best interest. The added benefit of dropping the tax is that the Federal Gov't can stop using this money to advance other agendas like the drinking age, speed limit and other initiatives that have been tied to these funds.

All this talk about a gas tax hurting the poor is just BS. Have you ever seen a group of people who more needed to lose weight more than the poor? Talk about obese! They can walk to work - or at least to the bus stop. Or they can ride their bikes.

Not only will a higher gas tax lead to more innovations in energy, it will create hundreds of thousands of new green jobs. Maybe some of those "poor" people who are not so lazy they insist on using a car to get to work will get one of those jobs and start contributing to POSITIVE lifestyle choices.

It's up to the wealthy and educated of this country to lead the way for the so-called "poor", at least the ones who aren't too lazy or too fat to walk.

Isn't it ironic that they are creating a special joint committee out of their concern for deficits, but the Republican leadership is releasing the House members for a FIVE WEEK vacation before passing an extension to the FAA? As a result, the FAA has lost some $210 million in revenues last week and will lose as much every week it doesn't have its extension. Bu the time House members get back and settled in and squabble and perform their political theatricals, expect US to lose a billion dollars in FAA revenue, thanks to Republicans and their real indifference to debt. The Senate, meanwhile, is staying in town to try to pass the FAA bill, but what good will it do if the House isn't here to pass it too? Not only are we losing all that revenue, but thousands have been thrown out of work because FAA construction projects have been suspended until the bill is passed and signed by President Obama. (Where is his voice on this matter? Where is his leadership? AWOL, that's where.) Republicans have hijacked yet another bill and are costing US dearly. Republicans have become terrorists and they are not only threatening to do great harm to our country if they don't get their way, they ARE doing great harm.

Roameo: "Republicans have hijacked yet another bill and are costing US dearly. Republicans have become terrorists and they are not only threatening to do great harm to our country if they don't get their way, they ARE doing great harm."..............Surely you could have included "hostages" in there somewhere. Why are you bucking the trend? I can't believe the current junta has failed to collect a tax though. Seems downright un-junta like.

All this talk about a gas tax hurting the poor is just BS. Have you ever seen a group of people who more needed to lose weight more than the poor? Talk about obese! They can walk to work - or at least to the bus stop. Or they can ride their bikes.

Not only will a higher gas tax lead to more innovations in energy, it will create hundreds of thousands of new green jobs. Maybe some of those "poor" people who are not so lazy they insist on using a car to get to work will get one of those jobs and start contributing to POSITIVE lifestyle choices.

It's up to the wealthy and educated of this country to lead the way for the so-called "poor", at least the ones who aren't too lazy or too fat to walk.

Well, may the Lord read what you wrote here. Because if there is one person that should "walk to work", use the "bus stop", "ride their bikes", and be poor, it is YOU!!! Not to mention, you don't know what the hell you're talking about by calling the poor, "lazy" and "obese". You obviously don't get out much! If you did, then you would know that most of the people making above the national average are the "obese" and "lazy" types that you rail about. And a lot of the low wage workers work hard and are fit.

And BTW, when has a higher gas tax created hundreds of thousands of jobs and innovations in energy?!? It hasn't...EVER! AGAIN you don't know what the hell you're talking about!

Spending our tax dollars on nation building by rebuilding damaged infrastructure, such as roads, is only for other countries. I really have to ask why these tea baggers hate Americans and the American economy?

These are the United States, not the 50 individual states. We are one nation, not 50. States are not islands among themselves, they trade with each other and conduct commerce with each other. What good is it for the nation having great roads in NY if you can't get to the ports in NJ? What good is having great roads and a port in NJ if the goods can't get out of the region due to poor roads and rail connections to other parts of the nation. We need good roads to transport goods internally.

The Dopey Dems and their media mouth pieces (Like Politico) are getting nervous that the Republicans are going to get let the taxes expire. They know that once the taxes are gone, we will be celebrating in the streets, gas prices will plummet almost .19 cents a gallon right off the bat. I would love to see the Democrats cry about the Republicans not raising our taxes.

Sorry Lefties but the Tea-Party runs D.C now, as witnessed by the Debt deal that just passed the House. Just like the FAA bill that has Furloughed 4000 Non-Essential government union slugs for two weeks so far (the Republicans have left town for 5-weeks yesterday, so at least another month before this has a chance to be resolved), the Democrats want to play games to keep their handlers happy (Union Bosses)? the Republicans let it expire, then went on vacation. This is payback for NLRB radicals screwing with Boeing. You would think the Big Mouth union thugs would learn their lesson? Look at Wisconsin, where a Union boss boasted about taking out Walker and making sure he lost the election with phony controversy they ginned up about the Milwaukee parking garage collapse that he had nothing to do with. Walker has essentially dismantled the unions in Wisconsin as Governor.....Payback sucks.

Obama and the Democrats don't want to cut spending? The Tea Party Legslators will let legislation and taxes expire to force Obama and the tax and spenders to comply.